Working Backwards: Insights, Stories, and Secrets from Inside Amazon

by Colin Bryar

be as effective as possible. We needed to improve each stage of these product meetings. We needed to begin by quickly and accurately caching the right information during the setup portion of the meeting. Then we had to focus on the most important issues moving forward. Finally, we had to map out a clear trajectory for the teams to follow between the current meeting and the next one.

In the end, what turned out to work best was relying on the core Amazon principle of customer obsession and a simple yet flexible way of writing narrative documents.

starting from the customer experience and working backwards from that by writing a press release that literally announces the product as if it were ready to launch and an FAQ anticipating the tough questions.

Jeff wanted us to know that we couldn’t just charge down the first available and most convenient path to chase after this opportunity. We needed to think through our plan in detail.

The great revelation of this process was not any one of the product ideas. As we’ve described in chapter four, the breakthrough was the document itself. We had freed ourselves of the quantitative demands of Excel, the visual seduction of PowerPoint, and the distracting effect of personal performance. The idea had to be in the writing.

It required us to be thorough and precise. We had to describe features, pricing, how the service would work, why consumers would want it.

After we started using the documents, our meetings changed.

We talked at length about the service itself, the experience, and which products and services we thought would appeal most to the customer.

then “throw it over the wall” to the marketing and sales people, who look at the product from the customer point of view, often for the first

and has determined that Sony should offer a 44-inch TV at a price point of $1,999. The engineering team, however, has been working on the new TV for quite some time, and their focus has been on picture quality, which means higher resolution, and they have not been especially concerned about price point. The TV they come up with will cost $2,000 just to manufacture. So there is no way that the retail price can be $1,999. If the two organizations had started the process by writing a press release, they would have had to agree on the features, cost, customer experience, and price.

When we wrote a Kindle press release and started working backwards, everything changed. We focused instead on what would be great for customers. An excellent screen for a great reading experience. An ordering process that would make buying and downloading books easy. A huge selection of titles.

The primary point of the process is to shift from an internal/company perspective to a customer perspective.

The PR gives the reader the highlights of the customer experience. The FAQ provides all the salient details of the customer experience as well as a clear-eyed and thorough assessment of how expensive and challenging it will be

The press release (PR) portion is a few paragraphs, always less than one page. The frequently asked questions (FAQ) should be five pages or less.

In the early days of the PR/FAQ, a common mistake people made was to assume that more means better. They’d produce long documents, attach page after page of narrative, insert charts and tables in an appendix. The virtue of this approach, at least from the perspective of the writer, is that it shows all their work and allows them to avoid hard decisions about what’s important and what’s not—leaving those for the group.

The creation of the PR/FAQ starts with the person who originated either the idea or the project writing a draft. When it’s in shareable condition, that person sets up a one-hour meeting with stakeholders to review the document and get feedback.

The most senior attendees tend to speak last, to avoid influencing others.

Once everyone has given their high-level responses, the writer asks for specific comments, line by line, paragraph by paragraph.

And so the process itself creates a tier of master evaluators as it vets and strengthens the idea and aligns everyone involved in the project, from individual contributor to CEO. It also increases the likelihood that a project will be approved and funded.

Press Release Components These are the key elements of the press release: Heading: Name the product in a way the reader (i.e., your target customers) will understand. One sentence under the title. “Blue Corp. announces the launch of Melinda, the smart mailbox.”

FAQ Components Unlike the PR, the FAQ section has a more free-form feel to it—there are no mandatory FAQs.

Often FAQs are divided into external (customer focused) and internal (focused on your company). The external FAQs are those that customers and/or the press will ask you about the product.

Feasibility What are the challenging product engineering problems we will need to solve? What are the challenging customer UI problems we will need to solve? What are the third-party dependencies we will need to solve?

The fact that most PR/FAQs don’t get approved is a feature, not a bug.

Leadership and management are often about deciding what not to do rather than what to do.

Bringing clarity to why you aren’t doing something is often as important as having clarity about what you are doing.

The deeper lesson, one that we’ll explore in this chapter, is this: share price is what Amazon calls an “output metric.” The CEO, and companies in general, have very little ability to directly control output metrics. What’s really important is to focus on the “controllable input metrics,” the activities you directly control, which ultimately affect output metrics such as share price.

Shortly after that holiday season we held a postmortem, out of which was born the Weekly Business Review (WBR).

Small teams, business category lines, and the entire online retail business all have their own WBRs.

When the retail, operations, and finance teams began to construct the initial Amazon WBR, they turned to a well-known Six Sigma process improvement method called DMAIC, an acronym for Define-Measure-Analyze-Improve-Control.1 Should you decide to implement a Weekly Business Review for your business, we recommend following the DMAIC steps as well.

Input metrics track things like selection, price, or convenience—factors that Amazon can control through actions such as adding items to the catalog, lowering cost so prices can be lowered, or positioning inventory to facilitate faster delivery to customers. Output metrics—things like orders, revenue, and profit—are important, but they generally can’t be directly manipulated in a sustainable manner over the long term. Input metrics measure things that, done right, bring about the desired results in your output metrics.

This sketch, inspired by the flywheel concept in Jim Collins’s book Good to Great, is a model of how a set of controllable input metrics drives a single key output metric—in this case, growth.

Therefore, it should be no surprise that almost all the metrics discussed in the WBR can be categorized into one of the flywheel elements.

We soon saw that an increase in the number of detail pages, while seeming to improve selection, did not produce a rise in sales, the output metric.

You’ll notice a pattern of trial and error with metrics in the points above, and this is an essential part of the process. The key is to persistently test and debate as you go.

Their focus shifted to reviewing other websites and retail stores and combing through Amazon search logs to determine what items people were searching for in each category but weren’t finding on Amazon.

The next step after determining which tools to use is to collect the data and present it in a usable format.

captures, from a customer point of view, what percent of the time they experienced that Amazon was in-stock on the item(s) they viewed.

Start with the customer and work backwards by aligning your metrics with the customer experience.

focus on variances and don’t waste time on the expected

We keep operational and strategic discussions separate

Here we provide an example of what that dual view looks like in practice.

With a sizable existing business, if you only pay attention to the output metric “revenue,” you typically won’t see the effects of new customer deceleration for quite some time. However, if you look at input metrics instead—things like “new customers,” “new customer revenue,” and “existing customer revenue”—you will detect the signal much earlier, and with a much clearer call to action.

Toyota approached quality control and continuous improvement. One technique they used in their automobile assembly line was the Andon Cord. The car-in-progress moves along the line, and each employee adds a part or performs a task.

That concern proved to be unwarranted—the CS agents were not overly zealous in pressing that button. It turns out that the Amazon version of the Andon Cord empowered the right people, those on the front lines who were talking directly to customers.

One issue was that the attendee list got more and more bloated, and we had to keep finding bigger conference rooms to fit everyone.

“Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.”

the most senior person should be responsible for setting the tone and ground rules every week.

should also, in this case, have limited attendance to owners and key stakeholders,

Many of the teams had skipped the first three DMAIC steps—define, measure, analyze—in an attempt to operate at the Improve stage.